Top 10 Financial Habits Keeping You Broke and How to Turn Your Situation Around

Money struggles often come from habits that quietly drain your resources.

These habits not only affect your personal finance but ripple through your family and community. Understanding these common pitfalls can help you shift your money mindset and build healthier money habits.

This post highlights the top 10 financial habits that keep people broke and offers practical ways to change course. It also points to free resources and companies like 2nd Look Services that can help recover lost money and improve your financial standing.

Unpaid bills and calculator on cluttered desk

1. Ignoring Budgeting and Tracking Expenses

Many people avoid budgeting because it feels restrictive or tedious. Without tracking where your money goes, overspending becomes easy. A clear budget helps you control your cash flow and identify unnecessary expenses.

How to fix it:

• Use free apps like Mint or EveryDollar to track spending automatically.

• Set simple categories and review your budget weekly.

• Adjust as needed to avoid surprises.

  
  

2. Living Beyond Your Means

Spending more than you earn is a fast track to debt. This habit often stems from a desire to keep up appearances or instant gratification.

How to fix it:

• Commit to spending less than your income.

• Delay big purchases and compare prices.

• Focus on needs before wants.

  
  

3. Relying on Credit Cards Without a Plan

Credit cards can be useful but dangerous when used irresponsibly. High-interest debt accumulates quickly if balances are not paid off monthly.

How to fix it:

• Pay your full credit card balance each month.

• Avoid using credit for everyday expenses unless you can pay immediately.

• Use credit cards with rewards but stay disciplined.

  
  

4. Neglecting Emergency Savings

Without a financial cushion, unexpected expenses force people to borrow or use credit cards, increasing financial stress.

How to fix it:

• Aim to save at least three to six months of living expenses.

• Automate transfers to a separate savings account.

• Start small and increase savings over time.

  
  

5. Avoiding Financial Education

Money fears often come from a lack of knowledge. Avoiding learning about personal finance keeps people stuck in poor money habits.

How to fix it:

• Read books, listen to podcasts, or take free online courses on personal finance.

• Join community workshops or webinars.

• Ask trusted financial advisors questions.

  
  

Person reading personal finance book at home desk

6. Impulse Buying and Poor Planning

Impulse purchases add up and disrupt budgets. Without planning, people often buy items they don’t need or can’t afford.

How to fix it:

• Make shopping lists and stick to them.

• Wait 24 hours before making non-essential purchases.

• Use cash instead of cards to limit spending.

  
  

7. Not Reviewing Bills and Subscriptions

Many people pay for services they no longer use or fail to spot billing errors, wasting money monthly.

How to fix it:

• Regularly review bank and credit card statements.

• Cancel unused subscriptions.

• Negotiate bills like cable, internet, or insurance for better rates.

  
  

8. Failing to Plan for Retirement

Delaying retirement savings reduces the power of compound interest and can lead to financial insecurity later.

How to fix it:

• Contribute to employer-sponsored plans like 401(k)s or IRAs.

• Increase contributions gradually.

• Use free retirement calculators to set goals.

  
  

9. Overlooking Tax Refund Opportunities

Many miss out on tax deductions, credits, or refunds due to lack of knowledge or poor record-keeping.

How to fix it:

• Keep organized records of expenses and income.

• Use free tax filing services like IRS Free File if eligible.

• Consider professional help to maximize returns.

  
  

10. Ignoring Unclaimed Money and Overpaid Taxes

People often overlook unclaimed funds or overpaid taxes that could be returned to them. This lost money could ease financial burdens.

How to fix it:

• Check with your state’s Escheats Department for unclaimed property.

• Use services like 2nd Look Services to recover overpaid income taxes.

• Regularly review your financial accounts for forgotten assets.

  
  

Person reviewing tax documents and unclaimed property notices

Free Resources to Improve Your Financial Situation

Many organizations offer free tools and advice to help improve your money habits and personal finance knowledge:

• Consumer Financial Protection Bureau (CFPB): Offers guides on budgeting, debt, and credit.

• National Foundation for Credit Counseling (NFCC): Provides free or low-cost credit counseling.

• MyMoney.gov: A government site with resources on saving, investing, and managing money.

• Local libraries and community centers: Often host free financial literacy workshops.

  
  

How Companies Like 2nd Look Services Can Help With Your Financial Habits

Recovering money you didn’t know you had can be a game changer. Companies like 2nd Look Services specialize in finding overpaid income taxes and unclaimed funds. They work on your behalf to review your tax history and identify refunds you may have missed. This service can bring back money that improves your cash flow without extra effort on your part.

Similarly, checking with your state’s Escheats Department can uncover forgotten bank accounts, insurance payouts, or utility deposits. Claiming these funds can provide a financial boost and reduce stress.